Kickoff for Biogas South America Opts for Green Energy Made by WELTEC- Interview with Aguinaldo Ramalho of the German biogas plant manufacturer-Weltec Biopower

Background information about biogas in South America

So far, the population of professional biogas plants in South America is rather small. Argentina and Uruguay merely have a total of two plants that correspond to European standards, one of which was made by WELTEC BIOPOWER. Ground basins with membrane roofs exist at another 30 locations in the two countries. However, these lagoons do not offer a stable biological process and lack a heater and professional mixing technology. In the past, membrane fermenters used to be employed in Brazil as well for the storage of liquid manure, but without using the gas for energy purposes. The number of biogas plants for landfills and wastewater treatment plants is also very small. The generation of power and heat from biomass still ranks third in the green energy mix in South America. More than two thirds are based on hydropower, and wind energy comes second. Experts believe that wind and biomass will be the fastest-growing areas in the years to come. Fossil energies will continue to play a key role – in Brazil, crude oil is used intensively for the entire primary energy consumption. After all, South America‘s most populous country wants to retain its energy autonomy with a mix of fossil and renewable energy sources and become largely independent from imports. Interestingly, renewables in South America are not always eco-friendly. For example, Brazil has several hydroelectric mega-dams that flood fast areas of rain forest and are causing severe floods.

Aguinaldo Ramalho of the German biogas plant manufacturer WELTEC BIOPOWER

Currently, the world is locked on to the FIFA World Cup in Brazil. Though they have already reached a high technical level as far as football is concerned, the South American countries still have development potential in the fields of biogas technology and renewable energies. In the interview, Aguinaldo Ramalho of the German biogas plant manufacturer WELTEC BIOPOWER talks about the potential, experiences and opportunities that exist in South America in this area.

Question :What are the conditions for the operation of biogas plants in South America?

Answer : In certain areas, the framework conditions are good in many countries, e.g. in Brazil. The plant technology employed in agriculture and for the industrial fermentation of sugar cane to ethanol is highly developed, and expertise is available in this subject area. Yet, many are still unaware of the possibility of using the leftovers of this process for energy production.

In terms of the substrates, the preconditions are promising: The World Cup host country with its population of almost 200 million is the world's second-largest manufacturer of bioethanol. Apart from the leftovers from this process, the waste industry also offers an enormous potential. This year, a new waste law entered into force in Brazil. The purpose of this law is to increase the proportion of waste that is recycled, utilised and duly disposed of. The agricultural industry in southern Brazil also offers a huge amount of input substances. All these substrates ‒ most of which have not been used so far ‒ offer ideal preconditions for the generation of energy in anaerobic biogas digesters.

Question : What circumstances are currently hindering the development?

Answer : Due to the lack of knowledge of the advantages of bioenergy, a green conscience, a kind of applied environmental conservation and an inclination towards promising energy concepts have not yet taken root. Perhaps the pressure to act is not yet high enough.

Another reason why investors are reluctant in many South American countries is the high inflation rate. With an inflation rate of almost six percent in 2013, Brazil has surpassed the ceiling of 4.5 percent that had been set by the central bank. Even a base interest rate of eleven percent has not been able to restore the trust of the investors so far. To be attractive, the plants would have to pay off in as little as about five years – an unrealistically short period.

Question : South American investors have already started benefiting from German plant expertise: In 2013, WELTEC built the first development stage of a 3-MW plant in Uruguay. Could such construction projects serve as reference projects?

Answer : Basically, yes, especially since decentralised energy production triggers numerous effects. In addition to supplying rural areas with energy, these projects create jobs and regional value chains. If such projects catch on, they can also serve as a business, energy and development policy instrument. Power generation from bioenergy is especially effective because it embraces several sectors and is suitable for many industries.

Moreover, it helps to overcome the frequent lack of practical knowledge in fields like combined heat and power generation. Though WELTEC was able to convince the client and operator in Uruguay with international experience and flexibility in scaling industrial plants, it was at least just as important for the investor that its dairy products for the Asian markets can be produced and packaged with power and especially process heat directly from the plant. Thus, there is a demand for projects that create independence – as is also the case with our current planning mandate in Brazil.

Question : What exactly is this project about?

Answer : As mentioned earlier on, Brazil is the world's number two bioethanol producer, after the USA. The leftovers of this process could be digested for energy production purposes in order to supply the power and heat for the production process. However, for climate-related reasons, sugar cane cannot be harvested throughout the year. Therefore, other raw materials also need to be used. This constant change of substrates in the course of the year is only one of the challenges that WELTEC BIOPOWER is faced with in the planning mandate.

The dimensions of this biomethane refinery are also unusual. Upon completion, it will have a yearly biomethane production capacity of more than 30 million standard m³, i.e. about 4,000 standard m³ an hour. It will be very important to efficiently ferment, not only the distillation residue, but also the straw and the plant pulp. The process requirements are very demanding particularly due to the high lignin content of the residual matter. And especially against the backdrop of the country's unused energy sources, it is important to utilise all energy resources.

There is also great potential in other areas: In the field of wastewater treatment plants, large amounts of sludge remain unused – another resource for biogas plants. Though some of the sludge is fermented, the gas is either flared in an uncontrolled manner or escapes into the atmosphere as a harmful greenhouse gas.

Brazil's agricultural sector also leaves substrates unused. Accordingly, the biogas plant population is underdeveloped in this country as well. In the hog belt down south, there used to be about 2,500 lagoons covered with membrane roofs for the fermentation of liquid manure back in the 1980s. However, only 20 of these still exist. So taking the size of the country into consideration, the bottom-line potential is gigantic.

Question : A glance at the near future: In two years, Brazil will stage the next mega-event: the Summer Olympics. Will the continent have made the needed decisions for the energy reform by then?

Answer : The Olympic flame that is going to be lit in Rio de Janeiro in August 2006 is not the only place that requires combustible energy sources. As the South American countries continue to prosper, the demand for energy will also surge in the years to come. For this, biogas would be ideal. Furthermore, all countries want to gain independence from energy imports. And even countries like Columbia, which have major coal reserves, will make use of regenerative sources in order to step up exports.

In Brazil, more than half of the energy already comes from renewable sources, mainly from hydropower and wind power. By next year, Uruguay also wants to reach this ratio. In countries like Argentina and Mexico, however, little will change by 2016. In these countries, the market is dominated by fossil energy sources, and on the political side, there is hardly any incentive to change the current situation.

No matter which country is concerned, green energy projects will only catch on if word gets around about the positive examples of decentralised energy production, especially in view of the size of the continent. For this, we depend on good experiences with reference projects, which people will talk about. With our current planning mandate in Brazil, we thus contribute to an increased focus on renewable energies throughout the continent in the near future.

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